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Does The Bullish Percent Index (Point & Figure) actually work?

DEAD

No edge left once tested on a fair footing.

The claim

The Bullish Percent Index (Point & Figure) times market turns — Classic market-breadth canon

What we did

Tested against Buy & hold SPY, 2012-2026, thresholds swept, null-floor controlled.

The result

Result: 0.1 dSharpe (vs buy-hold), OOS

OOS edge +0.10 vs buy-hold; data-mining noise floor ~+0.40 (below it = noise)

Verdict

The chartists' favorite breadth gauge -- the percent of stocks on a P&F buy signal -- which we built ourselves from the whole universe (no scraping). OOS +0.10, noise. Even this one doesn't time the market once you control for luck.

What the test did and did not do

survivorship-free universe
net of real costs
tested out of sample
point-in-time data
checked for look-ahead

Almost nobody publishing a backtest says which of these they did. We list the ones we failed as well as the ones we passed.

Tested 2026-06-23. The same treatment, applied to every other system, is on the test bench.

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Written with AI assistance from our own test database. The numbers are computed, not composed.
General market commentary for education, not personalised investment advice. Backtested results are hypothetical. Trading carries a real risk of loss.